Over Sh6bn distributed to MSMEs in last 4 years, Govt says

Source: Capital FM Kenya
Author: Ken Muthomi

NAIROBI, Kenya, April 28 - The government has revealed that over Sh6 billion has been distributed countrywide to support micro, small, and medium enterprises (MSME) across the country in the past four years.

Speaking during the inaugural public participation on credit guarantee policy and amendments to the Central Bank of Keya on Friday, the Principle Secretary of National Treasury, Chris Kiptoo, said that the funds, which were under the Pilot Credit Guarantee Scheme 2020, were distributed to over 4100 MSMEs across the 47 counties.

"To partly address the change of access to finance by MSMEs, the government of Kenya rolled out a pilot credit Guarantee scheme in December 2020. The scheme's objective was to support access to quality and affordable credit through a risk-sharing agreement with 7 participating banks," he stated.

According to the PS, the beneficiaries, among them youths, women, and persons living with disabilities, the majority of whom were new borrowers, supported 27,700 jobs across the country.

"The beneficiary MSMEs supported 25,703 jobs directly. Over 70% of the beneficiary MSMEs were new borrowers. This demonstrates the effectiveness of credit guarantees and derisking lending to MSMEs," he stated.

Furthermore, the PS revealed that the National Treasury has already proposed the establishment of a privately led Kenya Credit Guarantee Company that will be mandated to design and implement targeted guarantee products for key sections such as agriculture and rural economies, green economies, exports, and the manufacturing sector.

The PS is optimistic that the establishment of the company will be pivotal in increasing the impact of credit guarantees in the financial sector.

"The company will have both public and private equity ownership and hence will be more sustainable than the current CGS set up," he added.